ULTIMATE Forex Trading Beginners Course (This Is All You Need) transcript

in this video we're going to show you everything you need to know about Forex Trading fast there is also a free Forex Trading beginnner guide that works in combination with this lesson we'll show you how you can get it later in this video please hit the like button but more importantly hit the notifications Bell as it goes a long way in supporting our team so here's what we're going to be covering in this video starting with the charting software to the left is your drawing tools lines are used for drawing trend lines and chart patterns geometric tools are used for drawing support and resistance zones your indicators are up here to the right is where you have all the different currency pairs to watch for and trade these are all the ones we look at so add them into your trading software right now this here is the asset you are looking at and in this this case this is the dollar yen currency pair you can change your chart type up here we use Candlestick charts which is these rectangle bars on screen so here's how to actually read Candlestick charts green candlesticks are bullish because price appreciated and went upwards for the time period red candlesticks are bearish because price depreciated and went downwards for the time period this rectangle area is known as the Candlestick body or the real body these lines that stick out above and below the Candlestick body are known as the Wicks or Shadows or tails for green candlesticks the opening price is at the bottom of the Candlestick body and then the closed price is at the top of the Candlestick body for red candlesticks the opening price is at the top of the Candlestick body and the closing price is at the bottom of the Candlestick body the wick ends at the top represent the highest price point of the time period the wick ends at the bottom represent the lowest price point for the time period now let's go through this right on the charts this here is your time frame right now it shows 4H which means every Candlestick you see on screen represents 4 hours of time this here to the right is the price of the asset at each level so for example this green candle here green opens below and closes above meaning at the start of that 4 hours of time it opens at this price here to the right and closes at this price here to the right for this red candle here red opens above and closes below meaning at the start of that 4 hours of time it opens at this price here to the right and closes at this price here to the right let's now show you how to use the risk reward tool this longwick candle at a recent support level with two reversal points presented a trade setup you decide to enter long on this bullish momentum confirmation candle meaning your entry point would be on the candle close here to figure out your risk reward for this trade on the left here where it says forecasting and measurement tools click long position then click on screen where you decide to enter the trade your entry here is this price here to the right your stop- loss here is this price here to the right your profit Target here is this price here to the right your risk reward is set to a default of 1: one let's say you risk $10 on this trade when price hits your profit Target here you gain $10 if price were to go in the opposite direction and hit your stop loss you would lose the $10 you initially invested you risk one to either gain one or to lose one now let's say you want to set a risk reward of one for two when price hits your profit Target here you would gain $20 which is double your $10 initial investment if price were to go in the opposite direction hit your stop loss you would lose the $10 you initially invested you risk one to either gain two or to lose one next you need to follow economic events and news releases as these create Market volatility to track economic events click on the calendar here and you'll see a list of all the economic events for today click this button here so that it filters your calendar to only show high imp events this year is the time of the economic event releases this year is the country and currency of the economic event this here is what kind of economic event it is this here is what was forecasted and this here is what the actual released number was so they either met expectations which is neutral beat expectations which is a positive for the underlining currency or they missed expectations which is a negative for the underlining currency now here is a list of the big economic event releases we look at which heavily move the markets fomc meetings which involves interest rate announcements for the US economy and gives insight into the state of the US economy and shapes monetary policy this affects the dollar crossed pairs non-farm payrolls this measures the number of people employed in the United States minus certain groups such as Farm Workers this gives insight into the current economic situation and occurs on the first Friday of every month CPI inflation which is the Consumer Price Index and measures changes in the prices of goods and services in the United States and reflects the purchasing power of consumers higher CPI means higher inflation and results in less purchasing power and less spending by consumers while lower CPI means lower inflation and results in more purchasing power and more spending by consumers Fed chair speeches which is speeches by the Federal Reserve chair and gives insight into the central bank sentiment into things like interest rate decisions as well as future monetary policy European Central Bank or ECB meetings which gives insight into the European economy as a whole and provides things like interest rates similar to fomc this has an effect on euroc crossed pairs pce inflation which is the personal consumption expenditure inflation and is what the Federal Reserve prefers to use for gauging inflation retail sales is data that gives insight into the spending patterns of consumers and helps gauge economic growth gross domestic product and GDP growth rates which measures the total value of goods and services within an economy and gives insight into the health of an economy and its performance manufacturing purchasing manager index or PMI which gauges the manufacturing sector and its economic activity through showing an expansion of production or contraction of production Chinese data meaning any economic data out of China as they have a large effect on the world economy at large due to their massive role within it all economic data releases can create volatility and large swings of price which means potential larger profits but also potential larger losses moving on to the next topic iPic support and resistance so what is a resistance level when you look to the left you notice price go up before it suddenly stopped in its tracks changed directions and went downwards drastically this tells you that for whatever reason this area is of interest to buyers and sellers because once price got to the area buyers decided to close their long positions and sellers decided to open new short positions and that double action is what is required to trigger a drastic move in the opposite direction a quick note whenever you hear us refer to buyers and sellers we are referring to the big guys in large institutions who have the power and leverage to actually move the market so because there is buyer and seller interest at this area in the past there might be interest at this area again once price returns to this area in the future which presents trade opportunities now what you do is you draw a rectangle Zone from where the last reversal occurred and stretch it far out to the right this Zone acts as a reminder to yourself to look for trade opportunities once price reaches this area such as right here which presented a short trade opportunity so what is a support level when you look to the left you know it price go down before it suddenly stopped in its tracks changed directions and went upwards drastically this tells you that for whatever reason this area is of interest to buyers and sellers because once price got to the area buyers buyers decided to open new long positions and sellers decided to close their short positions and that double action is what is required to trigger a drastic move in the opposite direction you again draw a rectangle Zone from where the last reversal occurred and stretch it far out to the right this Zone then acts as a reminder to yourself to look for trade opportunities once price reaches this area such as right here which presented a long trade opportunity so what happens when price breaks through resistance price breaking through a key resistance level shows you are in a very strong uptrend with heavy bullish momentum this old broken resistance level then transitions into becoming a new support level and presents pullback long trade opportunities to trade with the strong moving uptrend so what happens when price breaks through support price breaking through a key support level shows you are in a very strong downtrend with heavy bearish momentum this old broken support level then transitions into becoming a new resistance level and presents pullback short trade opportunities to trade with the strong moving downtrend now here's a very important concept always treat support and resistance levels as wide general areas the reason most Traders fail at using support and resistance is because they expect picture perfect looking key levels and picture perfect trade setups every time but this is often not the case support and resistance levels and trade setups will often look imperfect because the market as a whole is imperfect so you need to learn to trade Within These imperfections or else you'll miss out on 90% of the best trades now there are actually many different types of support and resistance levels not all support and resistance levels are made equal different support and resistance levels have certain traits built into them that make them of higher quality let's now go through the different support and resistance high quality types and traits to look for type one a drastic steep reversal of price that moves a greater distance notice how once price got to this resistance level you had a steep sharp drop downwards not a slow gradual decline and price moved a greater distance and not just a slight bounce off the area again notice how once price got to the support level you had a steep sharp rise upwards not a slow gradual incline and price moved a greater distance and not just a slight bounce off the area from a price action standpoint this shows that these areas are of high interest to the big guys as they opened and closed large orders which is required to trigger such steep reversals of price that move a greater distance type two multiple reversals and reactions of price notice how at this key level price reacted and reversed off of it on five separate occasions which shows that this level is of high interest to buyers and sellers as they took action at the level time and time again type three swing highs and swing lows these touches here give you your standard key level these touches here give you another standard key level these reversal points at the top here give you your swing high level as it is the highest point that price has reached in recent time swing high levels are high quality because they represent areas where price is deemed very expensive which results in buyers often choosing to close out their lawn positions at these areas these reversal points at the bottom here give you your swing low level as it is the lowest point that price has reached in recent time swing low levels are high quality because they represent areas where price is deemed very cheap which results in buyers often choosing to load up on the asset as a value buy at these areas type four acted as both support and resistance notice how this key Zone here acted as resistance here and support here just like multiple reactions it shows that both buyers and sellers took action at the level on many separate occasions and on both sides of the level type five visually obvious these are the levels that you can spot right away within seconds of looking at a chart they are visually obvious and jump right out at you and are known as major levels these small bounces still give you a level but it is known as a minor level the easier to spot in visually obvious levels are the ones everyone can see meaning there are more eyes on the level which result in more action takers at the level especially the big guys type six recently respected test so finding this type of level requires Three Steps step one is to find the point where the key level originated step two is the key which is to look for a recent reversal off the same level to show that it is valid and respected during this current time period of the market essentially you are letting the market test the level to see if it is valid before you use it step three is your trade setup area and you go into this trade with confidence as your step two recent reaction tells you that this level is still bringing in interest from buyers and sellers during this current time period of the market type seven stacking high quality types and traits together evidently a lot of the types and traits we just covered will overlap with each other which is a good thing the more overlap there is the higher the quality of the key level and key Zone this level at the top here is a swing high level it has multiple reactions a drastic move away and is visually obvious this next level here acted as both support and resistance multiple reactions drastic move away visually obvious and it had a recently respected test this level at the bottom here is a swing l low level multiple reactions drastic move away visually obvious and had a recently respected test drawing support and resistance through applying wide zones so you want to draw your resistance levels to this area above price using the traditional methods this reversal Point here is one level drawn these reversal points here is another level drawn these reversal points here is another level drawn now the problem with drawing so many separate Levels Close by together is that it creates confusion and Analysis paralysis as you don't know which level to use for possible short trade setups so what you do is instead of drawing in all these separate lines draw a wide Zone instead that captures the entire area and then you look for reversal price action in the general area for possible short trade setups let's show this again these swing High reversal points draw a wide Zone like this these smaller reversal points draw a wide Zone like this these many reversal points draw a very wide Zone then your swing lows down here another wide Zone let's show this again [Music] so a question you probably have how far back should you go to draw in your key levels you always want to try to use recent key levels close to where you are currently like these here but now once price breaks through the swing High you have entered Uncharted Territory without any recent key levels in sight this is then when you would zoom out and look a bit further back to see if there is a key level which you have through this reversal point and level here once price hits the level you had a candle color change and a bearish momentum candle which means you can use this as an exit point or for a short trade setup moving on to the next topic Candlestick patterns starting with the long Wick candle you have a moving downtrend before a candle with the wick sticking out the bottom forms and triggers a reversal upwards the psychology behind this candle is that sellers are losing momentum because price failed to close as a bearish engulfing candle and instead swung all the way back up causing the wick to stick out the bottom the longer the wick the higher the quality of this Candlestick pattern the best best way to use this pattern is to combine it with key levels this reversal Point gives you a key support level price comes down forms the longwick candle presenting a long trade setup before reversing upwards now going in the opposite direction you have a moving uptrend before a candle with the wick taking out the top forms and triggers a reversal downwards the psychology behind this candle is that buyers are losing momentum because price failed to close as a bullish engulfing candle and instead swung all the way back down cusing the wick to stick out the top the longer the wick the higher the quality of this Candlestick pattern again the best way to use this pattern is to combine it with key levels this reversal Point gives you a key resistance level price comes up forms the longwick candle presenting a short trade setup before reversing downwards moving on to the next Candlestick pattern a cluster of longwick candles you have a moving downtrend before you have a cluster of long candles form which triggers a reversal upwards the psychology behind this pattern is that sellers tried over and over and over again to push price lower but failed and buyers held the area strong the more longwick candles that are clustered together the higher the quality of this pattern let's pair this with key levels key support level multiple long with candles presenting a long trade setup reversal upwards going in the opposite direction you have a moving uptrend before a cluster of longwick candles forms which triggers a reversal downwards the psychology behind this pattern is that buyers tried over and over and over again to push price higher but failed and sellers held the area strong the more longwick candles clustered together the higher the quality of this pattern let's pair this with key levels key resistance level multiple long with candles presenting a short trade setup reversal downwards moving on to the next pattern the inverted long Wick candle you have a moving downtrend before you have a candle with the wick sticking out the top and against the moving downtrend which triggers a reversal upwards the psychology behind this pattern is that buyers suddenly entered big at the area which causes the wick to stick out the top the longer the wick the higher the quality of this Candlestick pattern let's pair this with key levels key support level inverted long with candle presenting a long trade setup reversal upwards going in the opposite direction you have a moving uptrend before you have a candle with the wick sticking out the bottom and against the moving uptrend which triggers a reversal downwards the psychology behind this pattern is that sellers suddenly entered big at the area which causes the wick to stick out the bottom the longer the wick the higher the quality of this Candlestick pattern let's pair this with key levels key resistance level inverted long with candle presenting a short trade setup reversal downwards moving on to the next Candlestick pattern the candle color change you have a moving downtrend with consecutive red candles showing that sellers are in full control you then have a green candle finally appear resulting in price reversing upwards the psychology behind this Candlestick pattern is that price failed to make another red candle and instead made a green candle showing that sellers are losing momentum let's pair this with key levels key support level all red candles before a candle color changeed to Green occurs presenting a long trade setup and a reversal upwards going in the opposite direction you have a moving uptrend with consecutive green candles showing that buyers are in full control you then have a red candle finally appear resulting in price reversing downwards the psychology behind this Candlestick pattern is that price failed to make another green candle and instead made a red candle showing that buyers are losing momentum let's pair this with key levels key resistance level all green candles before a candle color change to red occurs presenting a short trade setup and a reversal downwards moving on to the next Candlestick pattern shrinking candles you have a moving downtrend and notice how every candle gets smaller and smaller and then triggers a reversal upwards the psychology behind this pattern is that sellers are losing momentum as the distance traveled per candle is getting shorter and shorter this pattern works best when the final candle closes as another reversal candle let's pair this with key levels key support level shrinking candles reversal candle and long trade setup and reversal upwards going in the opposite direction you have a moving uptrend and notice how every candle gets smaller and smaller and triggers a reversal downwards the psychology behind this pattern is that buyers are losing momentum as the distance traveled per candle is getting shorter and shorter let's pair this with key levels key resistance level shrinking candles a reversal candle and short trade setup reversal downwards moving on to the next Candlestick pattern the inside bar candle you have a moving downtrend before you have a candle form where its open and close fits within the open and close of the previous candle and triggers a reversal upwards the psychology behind this pattern is that price failed to make a lower low candle which signals a loss of momentum from the sellers that's paress with key levels key support level inside bar presenting a long trade setup reversal upwards going in the opposite direction you have a moving uptrend before you have a candle form where its open and close fits within the open and close of the previous candle which triggers a reversal downwards the psychology behind this pattern is that price failed to make a higher high candle and signals a loss of momentum from the buyers let's PR L this with key levels key resistance level inside bar presenting a short trade setup reversal downward moving on to the next Candlestick pattern momentum or engulfing candle you have a moving downtrend before you have a big green candle form where its body is significantly larger than the previous kandle or kandles and triggers a reversal upwards the psychology behind this pattern is that you have a large spike in buying presence thus creating such a large body let's par this with key levels key support level green momentum candle forms presenting a long trade setup reversal upwards going in the opposite direction you have a moving uptrend before you have a big red candle form where its body is significantly larger than the previous candle or candles and triggers are reversal downwards the psychology behind this pattern is that you have a large spike in celling presence thus creating such a large body let's let's paril this with key levels key resistance level red momentum candle forms presenting a short trade setup reversal downwards moving on to the next topic trend lines so before we continue we want to hear from you what other topics do you want us to cover next let us know in the comments below right now specifically what video topics you want us to cover next also please hit the like button as it goes a long way in supporting our team in a downtrend price makes lower lows and lower highs this allows you to place a trend line along the top connecting the swing high points it acts as a resistance level meaning short trade opportunities Arise at the trend line make sure to look for Candlestick patterns when price reaches the trend line to show our reaction to the trend line or else price can break through and you'll be faked out if price breaks above the trend line it can signal a trend change from a downtrend to an uptrend also in a downtrend you can place a trend line connecting the swing lows this means you can take long trades against the trend when price reaches the trend line and forms a Candlestick pattern this is a more aggressive entry because you are trading counter Trend and against the strong downtrend so if you decide to trade a counter Trend trend line trade make sure those are quick entries in and out to not get trapped going the opposite Direction in an uptrend price makes higher highs and higher lows this allows you to place a trend line along the bottom connecting the swing low points this trend line acts as a support level meaning long trade opportunities Arise at the trend line if price breaks below the trend line it can signal a trend change from an uptrend to a downtrend also in an uptrend you can place a trend line connecting the swing highs this means you can take short trades against the trend again this is a more aggressive entry because you are trading counter Trend and against the strong uptrend so if you decide to trade a counter Trend trend line trade make sure those are quick entries in and out to not get trapped moving on to the next topic chart patterns the double top pattern and double bottom pattern you first have your moving uptrend price then makes two same highs the tops essentially make a resistance level from a price action standpoint price failed to make a higher high but instead made a same high which shows a loss of momentum from the uptrend and from the buyers in the market next the double bottom pattern you first have your moving downtrend price that makes two same lows the bottoms essentially make a support level from a price action standpoint price failed to make a lower low but instead made a same low which shows a loss of momentum from the downtrend and from the sellers in the market so here are the best ways ways to use the double top and double bottom pattern starting with the first which is a neckline break entry you have your double top pattern that forms this reversal point between gives you your neckline once price breaks the neckline and makes a lower low you have a fully formed Trend change you would then take a breakout entry short after the neckline break as the reversal and Trend change is now confirmed from an uptrend to a downtrend going the other way you have your double bottom pattern that forms this reversal point between gives you your neckline once price breaks the neckline and makes a higher high you have a fully formed Trend change you would then take a breakout entry long after the neckline break as the reversal and Trend change is now confirmed from a downtrend to an uptrend the second way to use double tops and bottoms is to wait for a pullback entry after the neckline break you first have your double top pattern neckline break here but instead of taking the breakout entry you can take a pullback entry at the neckline and at the support turn into new resistance zone now this would be an imperfect short trade setup because if you watched our last video on support and resistance zones this isn't a slim level but a wide Zone and price pulls back and enters the wide Zone you had an inside bar and a bearish momentum candle confirmation let's show this again double top pattern neckline break here this pullback short trade to the neckline is imperfect because this isn't a slim level but a wide Zone once inside of the zone you had a long wi candle followed by a bearish momentum candle confirmation so going the other way you first have your double bottom pattern neckline break here pullback entry at the neckline here or at the resistance turn to new support level you had perfect multiple long with candles right at the neckline which presented a highquality long trade let's show this again double bottom pattern neckline break here this pullback long trade to the neckline is imperfect because this isn't a slim level but wide Zone once inside of the zone you had multiple consolidation candles moving sideways failing to make lower lows and once you had the higher high candle form the trend change is confirmed double bottom pattern neckline break here this here was your imperfect pullback entry to the wide Zone which presented a long trade opportunity you have your double bottom pattern neckline break here you then had a pull back to the neckline that also formed a long Wick candle a candle color change and a bullish momentum candle now even better this here is also the right shoulder of the inverse Head and Shoulders pattern which makes this an even higher quality long trade setup you can also interpret this as a slanted neckline all of this gives you an A+ long trade setup let's move on to the triple top and triple bottom pattern reversal point one reversal Point 2 and reversal Point 3 which creates the triple top pattern neckline here and once it breaks the reversal is confirmed and is when you would look for short entries reversal point one reversal Point 2 reversal Point 3 which creates the triple bottom pattern neckline here and once it breaks the reversal is confirmed and is when you would look for long entries moving on to the Head and Shoulders pattern here is the anatomy of the head and shoulders pattern left shoulder head right shoulder neckline break of the neckline completes the pattern and the reversal so let's show this right on the charts Now The Head and Shoulders pattern is a reversal pattern often used to identify a trend change from an uptrend to a downtrend your reversal Point here to the left is known as the left shoulder your reversal Point here and swing high is known as the head and the lower high reversal Point here is the right shoulder you have two same low reversal points here making a support level and is known as the neckline once the neckline is broken here price makes a lower low and The Head and Shoulders pattern is deemed complete and confirms the trend change from an uptrend to a downtrend so what does The Head and Shoulders pattern tell you from a price action standpoint this pattern shows a loss of momentum from the buyers in the market as price failed to make a higher high here and instead made a lower high showing the start of a trend change then once you had the lower low form you have a new moving downtrend through the lower high and lower low together so let's show this again left shoulder head right shoulder neckline once you had your break of neckline here this completes the head and shoulders pattern so going in the opposite direction this is the inverse Head and Shoulders pattern left shoulder head right shoulder neckline the break of the neckline completes the pattern and the reversal so on the charts now the inverse Head and Shoulders pattern is a reversal pattern often used to identify a trend change from a downtrend to an uptrend you have your clear moving downtrend through the lower highs and lower lows your reversal Point here to the left is the left shoulder your reversal Point here and swing low is the head and the higher low reversal Point here is the right shoulder the two same high reversal points here make a resistance level and forms the neckline once the neckline is broken here and price makes the higher high The Head and Shoulders pattern is deemed complete and confirms the trend change from a downtrend to an uptrend so what does the inverse Head and Shoulders pattern tell you from a price action standpoint this pattern shows a lot loss of momentum from the sellers in the market as price failed to make a lower low and instead made a higher low showing the start of a trend change then once you had the higher high form you had a new moving uptrend through a higher low and higher high together left shoulder head right shoulder these two reversal points here give you your neckline now instead of taking the breakout entry you would wait for a pullback entry to occur to the neckline followed by a Candlestick price action pattern to form once it got there to show a reaction to the neckline and support turned to new resistance level this here could have been any Candlestick price action pattern that formed but in this case here what you had was two candles with the Wix sticking out and an inside bar Candlestick pattern all which shows a reaction to the level once you had an intraday Trend change confirmation you would take short entries so again left shoulder head right shoulder these these two reversal points here give you your neckline again instead of taking the breakout entry you would wait for a pullback to occur to the neckline followed by a Candlestick price action pattern to form once it got there so again left shoulder head right shoulder these two reversal points here give you your neckline again instead of taking the breakout entry you would wait for a pullback to occur to the neckline and new support level you had a long with candle showing a reaction to the level now there were two ways to get into this trade one wait for an intraday Trend change confirmation for an earlier entry point or two if you trade using only one time frame trend line placed like this and once you had your break through with the momentum candle take a long entry moving on to the bow be and neutral flag pattern here is the anatomy of the B flag pattern you have your flag pull which is the moving uptrend you then have your bull flag pattern which is a descending Channel The Bull flag pattern has two parallel downward sloping trend lines placed above and below connecting the lower highs and lower lows the angle and slant of the two trend lines mirror each other the bull flake pattern signals consolidation and a pullback once you have a break above the upper trend line This signals the consolidation and pullback is over and that the larger uptrend will continue or to be more specific a break above signals new buyers have entered the market and signals fresh upwards momentum which is what pushes price even higher if price breaks below the pattern this can signal a possible Trend change downwards let's show this on the charts you have your flight pole and moving uptrend bull flag pattern and descending Channel downwards slanted trend line above parallel trend line below once you have a break above the upper trend line you would take a long entry as the larger uptrend will continue flag pole and moving uptrend B flag pattern and descending Channel downwards slanted trend line above parallel trend line below once you have a break above the upper trend line you would take a long entry as the larger uptrend will continue here is the anatomy of the bare flag pattern you have your flag pole which is the moving downtrend you then have your bare flag pattern which is an ascending channel the bare flag pattern has two parallel upwards sloping trend lines placed above and below connecting the higher highs and higher lows the angle and slant of the two trend lines mirror each other the bare flag pattern signals consolidation and a pullback once you have a break below the lower trend line This signals the consolidation and pullback is over and that the larger downtrend will continue or to be more specific a break below signals new sellers have entered the market and signals fresh downwards momentum which is what pushes price lower now if price breaks above the pattern this can signal a possible Trend change upwards let's show this on the charts flag pull and moving downtrend bare flag pattern and ascending Channel upward slanted trend line above parallel trend line below once you have a break below the lower trend line you would take a short entry as a larger downtrend will continue flag pole and moving downtrend bare flag pattern and ascending Channel upward slanted trend line above parallel trend line below once you have a break below the lower trend line you would take a short entry as the larger downtrend will continue flag pole bare flag pattern upward slanted trend lines but now notice how price breaks above and not below which triggers a trend change and reversal as price makes a higher high in this case you would take long reversal trades instead of short trades here is the anatomy of the neutral flag pattern in an uptrend you have your flag pole which is a moving uptrend you then have your neutral flag pattern which is a horizontal channel the neutral flag pattern has two parallel horizontal lines placed above and below connecting the swing highs and swing lows this is also known as support and resistance the neutral flag pattern signals consolidation and indecision once have a break above the resistance level this signals the consolidation is over and that the larger uptrend will continue or to be more specific a break above signals new buyers have entered the market and signals fresh upwards momentum which is what pushes price higher if price breaks below this can signal a possible Trend change downwards now going in the opposite direction a neutral flag pattern in a downtrend your flag pole is a moving downtrend you have your neutral flag pattern which is a horizontal Channel Once you have a break below the support level level this signals the consolidation is over and that the larger downtrend will continue or to be more specific a break below signals new sellers have entered the market and signals fresh downwards momentum which is what pushes price lower if price breaks above this can signal a possible Trend change upwards let's show this on the charts flag pull and moving uptrend neutral flag pattern and horizontal channel two parallel trend lines are placed above and below connecting the swing highs and swing lows once you have a break above resistance you would take a long entry as the larger uptrend will continue going in the opposite direction flag pole and moving downtrend neutral flag pattern and horizontal channel two parallel lines placed above and below connecting the swing highs and swing lows once you have a break below support you will take a short entry as a larger downtrend will continue moving on to the ascending descending and symmetrical triangle pattern starting with the ascending triangle pattern you have a moving uptrend the top side of the pattern makes same highs and creates a horizontal resistance level the bottom side of the pattern makes higher lows and allows for an ascending trend line to be placed if price breaks below the pattern this can signal a trend change from an uptrend to a downtrend if price breaks above this can signal a trend continuation upwards now on the charts you have a moving uptrend same highs allowing for a resistance level to be placed higher lows allowing for a trend line to be placed this gives you your ascending triangle pattern price breaks below the ascending triangle pattern which signals a trend change downwards if price broke above it would signal a possible Trend continuation upwards going in the opposite direction an ascending triangle during a downtrend you have your moving downtrend the top side of the pattern makes same highs and creates a horizontal resistance level the bottom side of the pattern makes higher lows and allows for an ascending trend line to be placed if price breaks above the pattern this can signal a trend change from a downtrend to an uptrend if price breaks below this can signal a trend continuation downwards now on the charts you have a moving downtrend same highs allowing for a resistance level to be placed higher lows allowing for a trend line to be placed this gives you your ascending triangle pattern price breaks below the ascending triangle pattern which signals a trend continuation downwards if price broke above it would signal a possible Trend change from a downtrend to an uptrend moving on to a descending triangle pattern you have a moving uptrend the top side of the pattern makes lower highs and allows for a descending trend line to be placed the bottom side of the pattern makes same lows and creates a horizontal support level if price breaks below this can signal a trend change from an uptrend to a Down Trend if price breaks above this can signal a trend continuation upwards now on the charts you have a moving uptrend same lows allowing for a support level to be placed lower highs allowing for a trend line to be placed this gives you your descending triangle pattern price breaks above signaling a trend continuation upwards if price broke below it would signal a possible Trend change downwards let's show this again uptrend support level connecting the same lows trend line connecting the lower highs giving you your descending triangle pattern price breaks above signaling a trend continuation upwards if price broke below it would signal a possible Trend change downwards one more uptrend support level connecting the same lows trend line connecting the lower highs giving you a descending triangle pattern price breaks low signaling a trend change downwards if price broke above it would signal a possible Trend continuation upwards now going in the opposite direction a descending triangle during a downtrend you have a moving downtrend the top side of the pattern makes lower highs and allows for a descending trend line to be placed the bottom side of the pattern makes same lows and creates a horizontal support level if price breaks Above This Could signal a trend change from a downtrend to an uptrend if if price breaks below this can signal a trend continuation downwards now on the charts you have a moving downtrend same lows allowing for a support level to be placed lower highs allowing for a trend line to be placed this gives you your descending triangle pattern price breaks below signaling a trend continuation downwards if price broke above it would signal a possible Trend change upwards let's show this again downtrend support level connecting the same low trend line connecting the lower highs giving you a descending triangle pattern price breaks below signaling a trend continuation downwards if price broke above it would signal a possible Trend change upwards one more downtrend support level connecting the same lows trend line connecting the lower highs giving you a descending triangle pattern price breaks above signaling a trend change upwards if price broke below it would would signal a possible Trend continuation downwards now moving on to the symmetrical triangle pattern you have a moving uptrend the top side of the pattern makes lower highs and allows for a descending trend line to be placed connecting all the points the bottom side of the pattern makes higher lows and allows for an ascending trend line to be placed if price breaks below this can signal a trend change from an uptrend to a downtrend if price breaks Above This Could signal a trend continuation upwards now now on the charts you have a moving uptrend lower highs allowing for a descending trend line to be placed higher lows allowing for an ascending trend line to be placed this gives you your symmetrical triangle pattern price breaks below signaling a trend change downwards if price broke above it would signal a possible Trend continuation upwards let's show this again uptrend trend line connecting the lower highs trend line connecting the higher lows giving you your symmetrical triangle pattern price breaks below signaling a trend change downwards if price broke above it would signal a possible Trend continuation upwards now going in the opposite direction a symmetrical triangle during a downtrend you have a moving downtrend the top side of the pattern makes lower highs and allows for a descending trend line to be placed the bottom side of the pattern makes higher lows and allows for an ascending trend line to be placed if price breaks above this can signal a trend change from a downtrend to an uptrend if price breaks below this can signal a trend continuation downwards now on the charts you have a moving downtrend lower highs allowing for a descending trend line to be placed higher lows allowing for an ascending trend line to be placed this gives you your symmetrical triangle pattern price then breaks below signaling a trend continuation downwards if price broke above it would signal a possible Trend change upwards let's show this again downtrend trend line connecting the lower highs trend line connecting the higher lows giving you your symmetrical triangle pattern price breaks below signaling a trend continuation downwards if price broke above it would signal a possible Trend change upwards moving on to the rising and falling wedge pattern the top side of the rising wedge makes higher highs which allows for a rising trend line to be placed the bottom side of the pattern makes higher lows which allows for a rising trend line to be placed now the key here is that the two trend lines are converging and are both in an upwards Direction this pattern then forms in both bullish and bearish markets here's your Rising wedge pattern in an uptrend if price breaks below the pattern you would take a short reversal trade going in the opposite direction here's your Rising wedge pattern in a downtrend if price breaks below the pattern you would take a short Trend continuation trade so next here's the anatomy of the falling wedge pattern the top side of the falling wedge makes lower highs which allows for a falling trend line to be placed the bottom side of the pattern makes lower lows which allows for a falling trend line to be placed now the key here is that the two trend lines are converging and are both in a downwards Direction this pattern then forms in both bullish and bearish markets here's your falling wedge pattern in an uptrend if price breaks above the pattern you would take a long continuation trade going in the opposite direction here's your falling wedge pattern in a downtrend if price breaks above the pattern you would take a reversal long trade moving on to the cup and handle pattern this is the anatomy and structure of the pattern you have a moving uptrend price forms a u-shape which is known as the cup price then forms a consolidation pattern which is known as the handle the handle can be any consolidation pattern that forms these two reversal points here give you your neckline if price breaks above the consolidation pattern above the handle and above the neckline the cup and handle pattern is complete you could then take a breakout long trade as the completion of this pattern signals a trend continuation upwards Traders will often Place their stop- loss below the neckline now this pattern ALS o works for trading reversals you have a moving downtrend your cup and handle pattern forms once price breaks the neckline your cup and handle pattern is complete and the reversal from a downtrend to an uptrend is also complete and as when you would take long trades now let's show this right on the charts you have your moving uptrend price forms a u-shape which is your cup price forms a descending Channel consolidation pattern which is your handle again your handle here could have been any consolidation pattern that formed but in this case you had the descending Channel pattern form these two reversal points give you your neckline once price breaks above the descending Channel consolidation pattern above the handle above the neckline and made a higher high the cup and handle pattern is complete you would then look for breakout long trade entry points as the completion of this pattern signals a trend continuation upwards now what does the cup and handle pattern tell in terms of price action one you're trading with momentum as the u-shaped price pattern represents upwards momentum two price failed to truly reverse off the key level and only made a slight bounce and slight pullback showing how strong the upwards momentum is three the consolidation pattern followed by a break above signals new buyers have entered the market four the break above the neckline makes this a fully formed moving uptrend the higher high and higher low now a very important Point don't expect a picture perfect bu the book cup and handle pattern to form every time in the real Market it will often form a lot Messier and imperfect just like the market itself if you just wait for Picture Perfect patterns you'll miss out on 95% of the best trades so let's show this again you have your moving uptrend price forms a u-shape which is your cup price forms forms an ascending triangle pattern which is your handle these two reversal points give you your neckline once price broke above the neckline and made a higher high the cup and handle pattern is complete and is when you would look for breakout long trades you have your moving uptrend price forms a u-shape which is your cup price forms a descending triangle pattern which is your handle these two reversal points here give you your neckline once price broke above the neckline and made a higher high the cup and handle pattern is complete and is when you would look for breakout long trades moving uptrend the u-shape is your cup the symmetrical triangle pattern is your handle these two reversal points give you your neckline the break above the neckline and higher high completes the pattern and is when you will look for breakout long trades now let's show this for a reversal trade you have your moving downtrend the u-shaped price pattern that forms gives you your cup the pullback downtrend pattern gives you your handle these two reversal points here give you your neckline once price breaks above the neckline and makes a higher high your pattern is complete and your larger Trend change is also complete from a downtrend to an uptrend A cup and handle pattern where the handle is a U-shaped pattern you have a moving uptrend price forms a u-shape which is your cup price then forms another u-shape which is your handle these two reversal points here give you your neckline if price breaks above the neckline the cup and handle pattern is complete and as when you would look for long breakout trade entries as this signals a trend continuation upwards now on the charts you have your moving uptrend price forms a u-shape which is your cup price then forms another u-shape giving you your handle these two reversal points give you your neckline once price broke above the neckline and made a higher high the cup and handle pattern is complete and is when you would look for long breakout trades let's show this again you have your moving uptrend here's your u-shaped price pattern and cup here's your u-shaped handle these two reversal points here give you your neckline the break above the neckline here is when you would look for long entry points here's your uptrend here's your cup here's your u-shaped handle here's your neckline break above the neckline here is when you will look for long entry points now let's show this for a reversal trade you have a moving downtrend here's your very wide u-shaped price pattern and cup here's your u-shaped handle which is also a massive bullish engulfing candle that breaks through the neckline and it makes a higher high this not only completes your cup and handle pattern but also completes the larger Trend change from a downtrend to an uptrend an inverse or inverted cup and handle pattern you have a moving downtrend price forms an upside down u-shaped pattern which is the cup price then forms another upside down u-shaped pattern which is your handle this handle can also be any consolidation pattern that forms these two reversal points here give you your neckline if price breaks below the neckline the inverse and inverted cup and handle pattern is complete you could then take a breakout short trade as the completion of this pattern signals a trend continuation downwards Traders will often Place their stop loss above the neckline now on the charts you have your moving downtrend price forms an upside down u-shape which is your cup price then forms another upside down u-shape giving you your handle these two reversal points here give you your neckline once price broke below the neckline and made a lower low the inverse and inverted cup and handle pattern is complete you would then look for breakout short trade entry points as the completion of this pattern signals a trend continuation downwards let's show this again you have a moving downtrend price forms an upside down u-shape which is your cup these two reversal points give you your neckline price then forms another upside down U shape giving you your handle that also breaks through the neckline with the bearish engulfing candle and makes a lower low completing your pattern you would then look for breakout short trade setups moving on to the next topic a bull market versus a bare Market starting with a bull market in a bull market you'll see price trending upwards you lean towards taking long trade setups to trade with the overall upwards Market momentum short trades in a bull market are riskier as they are short-lived and just corrective pullbacks before the larger uptrend continues now let's show how to identify a bull market through price action the first way to identify a bull market through price action is to identify higher highs and higher lows here's your moving uptrend notice how each new swing high is higher than the previous swing High notice how each swing low is higher than the previous swing low that means price is making higher highs and higher lows signaling a bull market and moving uptrend knowing this you lean towards taking pullback long trades at support levels and areas of value within the moving uptrend let's show this again higher highs and higher lows pullback long trades at support So moving on to the second way to identify a bull market which is through identifying consolidation patterns followed by a break above the pattern impulse move up any consolidation pattern from this list forms followed by a break above which signals the bull market will continue this is where your long entry point would be as it shows the consolidation is over and that the next leg of the uptrend and bull market has begun or to be more specific it shows new buyers have stepped in to continue the push upwards which resulted in the break above the pattern instead of below it again impulse move up consolidation pattern break above showing a continuation of the bull market impulse move up consolidation pattern break above showing a continuation of the bull market so moving on to the third way to identify a bull market which is through identifying massive bullish engulfing candles forming often when you can identify massive bullish engulfing candles forming often often that are larger than all other candles around them this shows there is heavy buying presence in the market and that the bull market is fully intact and will likely continue the fourth way to identify a bull market is when you can easily place a trend line below the uptrend these swing low points allow you to place an upward slanted trend line connecting them showing that this is a clear uptrend and bull market long trade opportunities present themselves at the trend line the fifth way to identify a bull market is when price is clearly above a moving average this is the 50 EMA you can use whichever moving average works best with your overall strategy notice how price is clearly above the moving average and not chopping through it which shows price is clearly in an uptrend and in a moving bull market let's now get into how to identify the end of a bull market the first way to identify that a bll Market is coming to an end is to identify a lower high that forms first you have a moving uptrend through the higher highs and higher lows you then have a lower high that finally forms which signals an end to the bull market and that a bare Market has begun the second way to identify that a bull market is coming to an end is to identify a lower low that forms first you have a moving uptrend through the higher highs and higher lows you then have a lower low that finally forms which signals an end to the bull market and that the bare Market has begun the third way to identify a bull market is coming to an end is to identify a consolidation pattern followed by a break below the pattern you have a moving uptrend price then forms a consolidation pattern it could have been any pattern from this list but in this case you had a descending triangle pattern price then breaks below the pattern and in the opposite direction of the larger moving uptrend and makes a lower low this signals the bull market is over and that a bare Market has begun the fourth way to identify a bull market is coming to an end is to identify a massive bearish engulfing candle you have a moving uptrend you then have a massive bearish engulfing candle that forms that is larger than any other candle around it this signals the bull market is possibly over and that a bare Market has begun as it shows heavy selling presence and that buyers are taking profit the fifth way to identify a bull market is coming to an end is to spot a break below a trend line you have a moving uptrend you have an upwards slanted trend line connecting the swing lows once price breaks below the trend line This signals the bull market is over and that the bare Market has begun the sixth way to identify a bull market is coming to an end is to spot a break below a moving average this is the 50 EMA you can use whichever moving average works best with your overall strategy notice how price is clear above the moving average and not chopping through it which shows price is clearly in an uptrend and in a moving bull market price then breaks cleanly below it which signals the bull market is over and that the bare Market has begun let's now move to Bare markets in a bare Market you'll see price trending downwards you lean towards taking short trade setups to trade with the overall downwards Market momentum long trades in a bare Market are riskier as they are short lived and just corrective pullbacks before the larger downtrend continues now let's show how to identify a bare Market through price action the first way to identify a bare Market through price action is to identify lower highs and lower lows here's your moving downtrend notice how each new high is lower than the previous swing High notice how each new swing low is lower than the previous swing low that means price is making lower highs and lower lows signaling a bare market and moving downtrend knowing this you lean towards taking pullback short trades at resistance levels and areas of value within the moving downtrend let's show this again Lower highs and lower lows pullback short trades at resistance so moving on to the second way to identify a bare Market which is through identifying consolidation patterns followed by a break below the pattern impulse move down any consolidation pattern from this list forms followed by a break below which signals the bare Market will continue this is where your short entry point would be as it shows the consolidation is over and that the next leg of the downtrend and bare Market has begun or to be more specific it shows new sellers have stepped in to continue the push downwards which resulted in the break below the pattern instead of above it again impulse moved down consolidation pattern break below the pattern showing a continuation of the bare Market so moving on to the third way to identify a bare Market which is through identifying massive bearish engulfing candles forming often when you can identify massive bearish engulfing candles forming often that are larger than all other candles around them this shows there is heavy selling presence in the market and that the bare Market is fully intact and will likely continue the fourth way to identify a bare market is when you can easily place a trend line above the downtrend these swing high points allow you to place a downwards slanted trend line connecting them showing that this is a clear down Trend and bare Market short trade opportunities present themselves at the trend line the fifth way to identify a bull market is when price is clearly below a moving average this is the 50 EMA you can use whichever moving average works best with your overall strategy notice how price is clearly below the moving average and not chopping through it which shows prices clearly in a downtrend and in a moving bare Market let's now get into how to identify the end of a bare Market the first way to identify a bare Market is coming to an end is to identify a higher low that forms first you have a moving downtrend through the lower highs and lower lows you then have a higher low that finally forms which signals an end to the bare market and that a bull market has begun the second way to identify a bare Market is coming to an end is to identify a higher high that forms first you have a moving downtrend through the lower highs and lower lows you then have a higher high that finally forms which signals an end to the bare market and that a bull market has begun the third way to identify a bare Market is coming to an end is to identify a consolidation pattern followed by a break above the pattern you have a moving downtrend price then forms a consolidation pattern it could have been any pattern from this list but in this case you had a descending triangle pattern form price then breaks above the pattern and in the opposite direction of the larger moving down tread it makes a higher high this signals the bare Market is over and that a bull market has begun the fourth way to identify a bare Market is coming to an end is to identify a massive bullish engulfing candle you have a moving downtrend you then have a massive bullish engulfing candle that forms that is larger than any other candle around it this signals the bare Market is possibly over and that a bull market has begun as it shows heavy buying presence and that sellers are taking profit the fifth way to identify a bare Market is coming to an end is to spot a break above a trend line you have a moving downtrend you have a downward slanted trend line connecting the swing highs once price breaks above the trend line This signals the bare Market is over and that the bull market has begun the sixth way to identify a bare Market is coming to an end is to spot a break above the moving average this is the 50 EMA you can use whichever moving average works best with your overall strategy notice how price is clearly below the moving average and not chopping through it which shows price is clearly in a downtrend and in a moving bare market price then breaks cleanly above it which signals the bare Market is over and that the bull market has begun let's now move to a sideways neutral Market notice how price is moving sideways meaning you have a neutral bias in your Market Direction when the market is trending sideways it makes roughly same highs and same lows you can easily identify the extreme swing highs and extreme swing lows you can also easily place a support Zone connecting the swing lows and a resistance Zone connecting the swing highs when you apply your moving average it is also going sideways and cutting right through price in a sideways neutral Market you can take both long trades and short trades with confidence moving on to the next topic trading indicators exponential moving average the exponential moving average or EMA is an indicator that removes the random fluctuations of price resulting in a cleaner visualization of the actual price movement this here is the exponential moving average the most commonly used moving average is the 50 EMA but other popular settings are 100 and 200 we use a variant of the moving average and if you're a member you'll know exactly what we're referring to so in a downtrend when you see price trending below the moving average this confirms bearish momentum and you would lean towards taking short entries you can also use the moving average as a form of resistance for bounce short trades if you see price break above the moving average this signals a lot L of bearish momentum and that a possible Trend change is coming from a downtrend to an uptrend in an uptrend when you see price trending above the moving average this confirms bullish momentum and you would lean towards taking long entries you can also use the moving average as a form of support for bounce long trades if you see price break below the moving average this signals a loss of bullish momentum and that a possible Trend change is coming from an uptrend to a downtrend if the moving average is cutting right through price this shows a sideways directionless Market stochastic oscillator to access this indicator click indicators type in a stochastic select it right here and it will appear below your chart the stochastic oscillator is a momentum indicator that is used to identify overbought or oversold prices the line above is 80 and the line below is 20 when the stochastic goes above 80 price is deemed overbought or expensive and signals a possible Trend change from an uptrend to a downtrend when the stochastic goes below 20 price is deemed oversold or cheap and signals a possible Trend change from a downtrend to an uptrend remember to pair the overbought and oversold regions with Trend change price action and not to use it on its own now another method to using the stochastic indicator is through the crossover method the blue line here is known as the percentage K this orange line here is known as the percentage D in an uptrend the percentage K is above the percentage D or blue is above orange but once the percentage D crosses below the percentage K or once the blue goes beneath orange this signals momentum loss from the buyers and that a possible Trend change is coming from an uptrend to a downtrend in a downtrend the percentage k is below the percentage D or blue is below orange but once the percentage k crosses above the percentage D or once blue goes above orange this signals momentum loss from the sellers and that a possible Trend change is coming from a downtrend to an uptrend again you should pair the crossover method with other price action such as using key levels this reversal Point gives you a key resistance level as price comes back up you have shrinking candles hanging candles and a very long with candle all showing a reaction to the level once you had the stochastic crossover occur this confirms the trend change from an uptrend to a downtrend and is when you would look for a short entry point the macd indicator so what is the macd indicator macd stands for moving average convergence Divergence the indicator tracks the relationship between two moving averages one fast and one slow now to keep things simple the macd indicator can be used for gauging or confirming Trend changes or Trend continuations so to access the macd indicator click on indicators type in macd and here it is moving average convergence Divergence once you click it it will then appear down here below your charts leave the settings as the default which are fast length 12 slow length 26 and Signal smoothing 9 the line in green here is the macd line also known as the fast length the line in white here is the signal line also known as the slow length and this here is the histogram now the first way to use the macd is through the crossover method so price is trending downwards then once the macd line crosses above the signal line it signals a possible Trend change from a downtrend to an uptrend meaning possible long trade opportunities present themselves going in the opposite direction when price is trending upwards and the macd line crosses below the signal line it signals a possible Trend change from an uptrend to a downtrend meaning possible short trade opportunities present themselves the next way to use the macd is through the histogram method in an uptrend when you see the histogram bars getting larger and larger it shows a gain of upwards price momentum which can be used for continuation long trade entries but then when you notice the histogram bars starting to shrink it signals a loss of momentum and may result in a possible Trend change from an uptrend to a downtrend and presents possible reversal trade opportunities short going in the opposite direction in a downtrend when you see the histogram bars getting larger and larger it shows a gain of downwards price momentum which then can be used for continuation trades short but then when you notice the histogram bars starting to shrink it signals a lot loss of momentum and may result in a possible Trend change from a downtrend to an uptrend which then presents possible reversal trade opportunities long the RSI indicator RSI stands for relative strength index and it's an indicator that you apply to your charts that is often used for identifying overbought or oversold markets so let's apply the RSI to our charts at the top here click indicators type in R and it'll show up right here click relative strength index and then it will be applied to your charts along the Bottom now this line here is 70 on the RSI and this line here is 30 on the RSI everything at or above the 70 Line is what we call the overbought Region everything at or below the 30 line is what we call the oversold region so in relative to terms when the RSI line touches the 30 just like it is right here it indicates that the price of the asset you were looking at is cheap when the RSI line touches the 70 just like it is right here it indicates that the price of the asset you are looking at is expensive when the RSI enters oversold they'll start buying and entering long positions expecting price to go up when the RSI enters overbought they'll start selling and entering short positions expecting price to go down the Ballinger bands indicator so to access the Ballinger band indicator find your indicators type in Ballinger select the indicator and it will appear as an overlay on top of your charts leave the settings as the default which is the middle line being a 20 period moving average the upper band being two standard deviations above the middle line and the lower band being two standard deviations below the middle line so the bands are traditionally used to interpret Market volatility during periods of low volatility you'll often notice that the bands contract and can result in a sideways consolidating market during periods of high volatility you'll often notice the bands expand and can result in a trending Market so one of the traditional ways Ballinger bands are used is as a form of support and resistance when price reaches the band above it can act as a form of resistance and bounce off of it and reverse downwards when price reaches the band below it can act as a form of support and bounce off of it and reverse upwards notice how the bands are moving horizontally and price is moving sideways so whenever price hits it results in a quality reversal now as promised to access the Forex Trading beginners guide that works in combination with this video go to the description below and click the link for instant access make sure to hit the like button as it allows forour team to continue to produce more free content on YouTube also tell us in the comments below right now what video topics we should cover next [Music]